This project will investigate thalamocortical networks in schizophrenia (SZ) and psychotic bipolar disorder (BD). Despite considerable evidence that the thalamus is abnormal in psychosis, several knowledge gaps must be addressed before thalamic pathology can be established as a biomarker. First, although attention has focused on the mediodorsal (MD) nucleus, conflicting findings from post-mortem studies and limitations of conventional imaging approaches has made it difficult to establish the anatomical specificity of thalamic pathology. Second, it is not known if thalamocortical dysconnectivity extends to psychotic BD. Overlapping deficits in cognitive functions supported by the thalamic circuitry, including working memory (WM), suggests this may be the case. However, differences in the pathways leading to cognitive impairment also predict there will be differences. In SZ, cognitive impairment is superimposed on a background of compromised pre-morbid functioning and remains stable across illness stages. In BD, pre-morbid functioning is intact and cognitive impairment is relatively modest in the early stage of the illness; whereas chronic patients are virtually indistinguishable from SZ. This has led to different etiological models of psychosis: SZ is conceptualized as a neurodevelopment disorder and BD a neuroprogressive illness. These models predict overlapping abnormalities in thalamocortical circuitry in chronic patients, but differential impairment in the early stage of psychosis. Finally, despite compelling evidence from animal models linking thalamocortical dysconnectivity to WM, the functional consequences of thalamocortical network dysfunction are poorly understood. In separate studies of chronic (Aim 1) and early stage psychosis (Aim 2), we will determine if thalamocortical network pathology varies in accordance with the different trajectories of cognitive impairment in psychotic disorders, and is related to WM impairment (Aim 3). We will test the following specific hypotheses: 1) in chronic psychosis, both SZ and psychotic BP patients will exhibit reduced connectivity between the PFC and MD thalamus; and 2) in early stage psychosis, SZ, but not psychotic BP, will exhibit reduced PFC-MD thalamus connectivity. Additionally, we will test the hypothesis that somatomotor hyper-connectivity observed in prior studies of chronic SZ, which we proposed is due to atypical pre-morbid brain maturation, is present in early stage SZ, but not early stage or chronic psychotic BP. If confirmed, these hypotheses will provide a powerful approach to differentiating psychotic disorders at both early and chronic stages of the illness, and further support the different etiological models of SZ and BD. Alternatively, the results might indicate there is greater overlap in thalamocortical pathology between SZ and BD than appreciated and challenge the different etiological models of these disorders. Moreover, examining functional connectivity during WM may provide translational evidence supporting a mechanistic thalamocortical dysconnectivity model of WM impairment and identify potential treatment targets for ameliorating cognitive impairment.